SAULT STE. MARIE, Mich. (MIRS News) – The Sault Ste. Marie Tribe of Chippewa Indians said it will likely appeal a ruling that awarded nearly $88.9 million in damages to the developers of proposed casinos in Ingham and Wayne counties.
First, on Jan. 25, the Tribe will ask for relief from Ingham County Judge Joyce Draganchuk’s Jan. 3 ruling.
“The Sault Tribe is deeply concerned with what it has discovered in reading the Court’s opinion,” said Sault Tribe Chairman Austin Lowes on Monday. “Our board has met with our legal counsel and is hopeful a new direction will lead to a better outcome.”
Tribe officials replaced its legal representation with Daniel V. Barnett of Grewal Law PLLC.
The Tribe’s gaming arm, Kewadin Casinos Gaming Authority, had partnered with the developers, JLLJ Development and Lansing Future Development, to construct the casinos – one in Lansing and the second on land between Romulus and New Boston.
The Tribe acquired the land, but plans for the two casinos stalled due to unsuccessful attempts to gain approval from the U.S. Department of the Interior to bring the proposed casino land into trust, which is required to operate casinos outside of a tribe’s reservation.
As a result, the investors filed suit in March 2021 seeking their money back plus lost profits.
The Tribe’s original attorneys with Patterson Law Firm challenged the state court’s jurisdiction, unsuccessfully arguing the Tribe has sovereign immunity. The court also rejected the Tribe’s arguments that the court lacked subject matter jurisdiction.
Draganchuk’s order outlined the case history, noting that Kewadin’s original attorney ignored court requirements, including filing a trial brief and failing to appear at hearings.
The development investors advanced a combined $8.8 million to the Tribe, which allegedly made representations that it had the right to acquire land, which was legally entitled to be placed in trust, but that did not happen.
Kewadin argued it is not liable to the investors because of a non-recourse provision in the loan agreements, but Draganchuk disagreed.
“No reasonable interpretation of the loan documents that took into account all the provisions could possibly conclude that plaintiffs were giving nearly $9 million to Kewadin in the hope that they would build a casino, but in the event they did not, the loans would be fully forgiven,” the judge wrote.
Draganchuk said the developers are entitled to damages for breach of contract and fraudulent misrepresentation.
The nearly $88.9 million award also accounts for $11.4 million in principal and interest from the initial loans, as well as more than $75.3 million in lost income from the temporary and permanent casinos that never opened.